Experts say the timing of Prime Minister Justin Trudeau’s announcement to step down as leader of the Liberal party of Canada will complicate trade negotiations with the U.S.
On Monday, Trudeau announced his decision to step down while declaring his intention to stay on as prime minister while a new leader is chosen and is proroguing Parliament while the process occurs.
Lisa Raitt, vice-chair of global investment banking at CIBC Capital Markets and former deputy leader of the Conservative Party, said in an interview with BNN Bloomberg Monday that she believes Trudeau is stepping down “because his team doesn’t want him there anymore.”
She added her belief that the issue could have been dealt with previously and will now impede trade talks with the U.S. around the issue of tariffs.
“You have to realize that this is happening against the backdrop of the incoming president, President (Donald) Trump threatening serious tariffs on the day that he takes over as the president of the United States. That has an incredible impact on the Canadian economy,” Raitt said.
“And right now we’re going to have a lame duck prime minister. We don’t know who’s going to be the next prime minister.”
Trudeau’s announcement came the same day the U.S. president-elect denied reports that his aides were contemplating narrowing his proposed tariff plan to apply only to a limited number of critical imports, according to Bloomberg News. Previously, Trump threatened a 25 per cent tariff on both Canadian and Mexican imports, an issue that former Finance Minister Chrystia Freeland highlighted in her resignation letter.
Joe Oliver, a former finance minister, also shared concerns about the prime minister’s decision to step down amid trade tensions.
“The governor general really, by constitutional convention had to agree to prorogation, it’s never been refused. But she did not have to agree to the length of the prorogation because this is going to seriously damage the country in its negotiations with the incoming U.S. president,” he said in an interview with BNN Bloomberg Monday.
Raitt added that she would be “more comfortable” if an election had been called that would let Canadians decide the path forward, since changing the leader of the Liberal party “isn’t going to change the fact that it’s the Liberal party.”
“So, it’s the worst timing possible, quite frankly, that the Liberal party decides that they’re going to make and throw upon the Canadian public this incredible change,” she said.
Going forward, Raitt urged Canada to rely on relationships between its business community and U.S. counterparts.
“We have to (also) rely upon the relationships that Canadians have built politically as well across the border just to try to make sure there’s not as much damage as possibly could be had if these tariffs are put in place,” she said.
“It’s one thing to be involved in negotiating a new NAFTA (North American Free Trade Agreement), that’s fine. It’s the actual setting of these tariffs that have the maximum amount of damage,” she said.
Given Trump’s comments on the issue of tariffs on Monday, Raitt noted her negative outlook on the issue.
“I’m cautiously pessimistic, quite frankly, as to whether or not it’s going to be a difficult time for us between now and March when the government has decided who the next leader is, who the next prime minister is, and quite frankly, how we’re going to proceed,” she said.
“We’d be better off with an election right now, to be honest, and just get it all out of the way.”